FLIGHT CENTRE SHARES TAKE OFF FOLLOWING RESULT

Written on the 27 August 2015 by Laura Daquino

FLIGHT CENTRE SHARES TAKE OFF FOLLOWING RESULT FLIGHT Centre (ASX: FLT) is flying at new record heights as corporate travel and transaction values continue to climb.

In line with its last earnings guidance however, the company has reported a 3.3 per cent fall in underlying profit after tax to $254.8 million for the full year.

Its statutory after tax figure was up 24 per cent to $256.6 million.

Following this announcement, the company's share price surged 15 per cent or $4.57 from market open to $36.83 per share. 

The year was one of record global sales with new total transaction value milestones achieved in 10 countries and regions. The company increased total transaction value in dollar terms by $1.55 billion globally and by $445 million in Australia.

Corporate brands increased turnover by 16.3 per cent globally to $5.7 billion, without significant acquisitions, with its Australian corporate businesses achieving record overall EBIT and sales to turn over around $2.3 billion.

This was crossed with significant investments in people and multi-channel networks.

The overall yearly result was the second best in the company's history, despite the impact of a market slowdown in Australia that Flight Centre has today and previously connected to the May 2014 budget announcement.

Outbound travel growth slowed to 2.9 per cent from 7 per cent a year earlier - although the company notes that a lower Australian Dollar hasn't deterred trips to America. 

"In Australia, consumer confidence remains relatively subdued but we are seeing positive momentum in leisure travel, with customer enquiry currently tracking above target and sales in key sectors continuing to grow," says Flight Centre managing director Graham Turner.

"Gross margins in Flight Centre brand have also rebounded and we have started to see some improvement in the niche leisure brands."

Flight Centre has ramped up investment in its bricks and mortar stores due to the threat posed by online rivals, which its last guidance revision paid mention to, by increasingly focusing on creating experiences on top of a sales space which it has referred to as 'blended travel'.

This direction aligns with the company's development of hyperstores, which it says also meshes with the trend of mega shopping centres.

Overseas, Asia and the Middle East were the group's fastest growing operations from a relatively small base, while its large operations in the US and UK kept up pace, and the only region to record a loss for the period was Canada.

The company anticipates 'strong momentum following record wins' during 2014-15 over the next financial year in its corporate businesses.

It will also stir up its 'blended' offering by introducing an accommodation aggregation tool that will draw from a range of databases to give customers access to 400,000 properties globally, addressing new competitive threats.

"One of FLT's strengths - and a key point of difference - is that it can offer customers the best of both the on and offline worlds via brands like Flight Centre," says Turner.

Flight Centre sees solid growth prospects globally during 2015-16 and will target an underlying profit before tax of between $380 and $395 million for the year. If achieved, this will represent 4 to 8 per cent on the $366.3 million statutory profit before tax achieved during 2014-15.



Author: Laura Daquino Connect via: Twitter LinkedIn

Latest News

STAFF CHURN BLAMED FOR MCGRATH EARNINGS DOWNGRADE

MCGRATH will fail to meet earnings forecasts after some of its star real estate agents defected to growing Perth firm...

MCBAIN RESIGNS AS BELLAMY'S DIRECTOR WHILE THIRD CLASS ACTION MOVES CLOSER TO SECURING FUNDING

LAURA McBain (pictured) has resigned as a director of Bellamy's Organic (ASX: BAL) today, effective immediatel...

REDBUBBLE TO MISS IPO FORECASTS

REDBUBBLE, the online marketplace for independent artists, will miss a series of forecasts set out in its IPO in its ...

BLUESCOPE CONTINUES STRONG RUN WITH GUIDANCE UPGRADE

BLUESCOPE Steel (ASX: BSL) is trading up 7.51 per cent at $11.16 per share after upgrading its half-year guidance thi...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter